Tax reform could impact Iowa student loan program

WASHINGTON, D.C. (GRAY-TV D.C. BUREAU) - Senate and House Republicans are trying to work out the differences between their respective tax bills. That means a program intended to help Iowa's families pay for college, is in limbo.

"It's going to actually cost families a lot more money," says Education Finance Council President Debra Chromy.

Concern that Republican tax reform will cut an exemption for something called qualified student loan bonds.
Student loan programs in 19 states rely on those tax-exempt bonds to help middle-class families who can't pay for college out of pocket
Advocates argue loans backed by the tax-exempt bonds have collectively saved families 815 million dollars, or about 21-hundred dollars for each borrower.

"They have very low-interest rates, very favorable terms," Chromy added.

The Senate Republican tax plan keeps the tax carve-out for the bonds, while the House Republican plan cuts it.
We asked the White House's ambassador to Congress to weigh in on which plan should move forward.

"I think we're not going to choose sides on that one right now we're comfortable with looking at how conference resolves that one," said Marc Short, White House Legislative Affairs Director.

Iowa Senator Chuck Grassley (R) Iowa is one of the leaders on the Senate Finance Committee and could have a role in figuring out how to combine the Senate and House tax bills. Four congressmen from his state sent a letter to Republican leadership urging the qualified student loan bond tax exemption be protected.

We asked Grassley how strongly he'll fight for the Senate's plan of not touching the exemption.

"So when it comes to conference between the House and Senate, if what you asked me about was changed a little bit, the overriding need of tax reform and tax cuts are so important, I would vote for it anyway," said Grassley.

Republican leadership wants to finish combining the Senate and House tax bills by December 18th.